US open: Stocks rebound slightly as bond yields, oil prices ease

(Sharecast News) - Sharp falls in oil prices and bond yields pushed US stocks slightly higher after the opening bell on Wednesday, with the S&P 500 and Nasdaq set to snap a three-day losing streak after hitting record highs last week. However, gains were moderate, with investors unlikely to stray too far from the sidelines ahead of the release of minutes of the latest Federal Reserve meeting and an earnings release from Nvidia - due out at 1900 BST and 2100 BST respectively.

The Dow opened down 0.1%, while the S&P 500 rose 0.3% and the Nasdaq gained 0.5%.

Dampening stocks over recent sessions has been a sell-off in the bond market, with the 10-year US Treasury yield hitting a 16-month high (4.671%) and the 30-year yield rising to its highest since 2007 (5.174%).

"These moves came as the markets continue to price in raised inflation expectations because of the ongoing war between the US and Iran, and the continued closure of the Strait of Hormuz," said David Morrison, senior market analyst at Trade Nation.



Easing those concerns slightly on Wednesday was a 2.2% drop in the price of Brent crude to $108.80 a barrel, while 10-year and 30-year US Treasury yields retreated (albeit only to 4.660% and 5.174% respectively).

"Traders are also girding their loins ahead of chip-giant NVIDIA's earnings release after tonight's close. NVIDIA is the world's largest company by market capitalisation and has been one of the main drivers of stock market gains from the lows of October 2022. So, what happens here matters. A look at options positioning ahead of the release suggests that traders are preparing for a swing of 6.5% in both directions, although there's a slight bias towards a bullish outcome," Morrison said.

Nvidia shares edged higher in early deals, attempting to rebound after dropping 6.4% over the past three days. Chip peers Intel, Broadcom, Micron Technology and AMD were putting in a more impressive performance after recent heavy falls.

A host of other corporate earnings were keeping investors busy, with Target, VF Corp, Lowe's and Hasbro all underwhelming with their latest numbers.

In particular, Target dropped 7.5% early on despite reporting its strongest sales growth in four years with comparable sales up 5.6%, while Lowe's fell 4.5% even after beating analysts' estimates, helped by a 15.5% surge in online sales.

In economic data, US mortgage applications fell 2.3% in the second week of May, according to the Mortgage Bankers Association, pulling back after a 1.7% gain the preceding week amid ongoing economic uncertainty and higher mortgage rates.